Sep 6, 2006 12:02 PM,

Huawei takes Alcatel's optical crown

By Ed Gubbins

Alcatel was bumped from its spot as the world's leading supplier of optical networking hardware for the first time ever in the second quarter, according to Infonetics Research.

Huawei Technologies took the biggest share of the $3.1 billion optical hardware market in the second quarter, jumping from fourth place to first as its optical revenue jumped 83%. Infonetics principal analyst Michael Howard called the leap "a rare feat."

Rounding out the top four were Nortel Networks and Tellabs, in that order.

"For the first time in optical network hardware market history, Alcatel is not in first place," Howard said. "Next quarter may be a different story."

In its own report released last month, Ovum-RHK called this year's second quarter the best three months the optical equipment sector has seen in four years. A long list of vendors saw year-over-year gains in optical revenue, including Adva Optical Networking, ECI Telecom, Ericsson, Nortel, Siemens, Sycamore, Tellabs, Transmode and ZTE. Alcatel's optical revenue was up 25% from a year earlier, and Cisco Systems' was up 23%.

The majority of the quarter's optical revenue (68%) came from metro optical gear, with sales of reconfigurable optical add/drop multiplexers (ROADMs) up 23% from a year earlier, Infonetics said.

The market was split fairly evenly among North America, Asia and the combination of Europe, the Middle East and Africa, where Huawei found much of its gains.

In another recent report, UBS Investment Research suggested that mergers such as the one Alcatel has planned with Lucent Technologies could pressure Huawei to refine its market focus.